Government to come out with more steps to attract foreign funds

New Delhi: Faced with sliding rupee, the government assured foreign institutional investors (FIIs) that it is contemplating more steps soon to make investments in India more attractive, according to sources.

This assurance was believed to have been given by Finance Minister P Chidambaram during his meeting with some important institutional investors.

After his meeting, he told reporters: "Everyone was here, everyone was bullish, there were no concerns."

The meeting took place amid the decline of rupee against the US dollar for the fifth day in a row.

The rupee closed at 63.71 against the US dollar today, down 47 paise or 0.73 per cent over yesterday.

According to sources, the steps may include greater participation for FIIs in currency derivative market, easy conditions for collateral and modification in FEMA rules.

Most of the proposed measures would not require changes in legislation, they said. The foreign institutional investors may also be allowed to use domestic securities as collateral.

During the meeting, FIIs reportedly sought removal of short-term capital gains tax. They were assured by the officials about the government's commitment on sticking to the targets of fiscal deficit and current account deficit.